Olympics Draws Top Players, Bearing Bids

These top media executives are leading contingents fromComcast’s NBCUniversal, Disney’s ESPN/ABC and NewsCorp.’s Fox Sports on June 6 and 7 to the home of the InternationalOlympic Committee in Lausanne.

There, International Olympic Committee presidentJacques Rogge, executive committee member RichardCarrion, who will serve as lead negotiator, and others willconduct the auction to the U.S. rights to the 2014 and 2016Games in Sochi, Russia, and Rio de Janeiro, Brazil.

The price is expected to be steep: The IOC would like tomatch if not exceed the $2.2 billion that NBCU, under GeneralElectric’s watch, paid for the rights to the 2010 Winter Gamesin Vancouver ($820 million) and next year’s Summer Olympicsin London ($1.2 billion).

PRUDENCE PROCLAIMED

All of the media conglomerates are proclaiming that their bidswill be steeped in fiscal responsibility, a prudent tack given thatNBCU lost $223 million on its coverage from Vancouver lastyear. Projections call for NBCU’s red ink to total $250 millionfrom across The Pond next summer.

Last time the auction was held in 2003, it was no contest.NBC’s total bid dwarfed Fox’s $1.3 billion, while ESPN/ABCplayed a $1.8 billion revenue-sharing gambit.

The IOC has held off this auction, waiting first for the U.S.economy to recover and then for upfront presentations tobe over.

“It’s going to be fascinating to watch. Th ere are three motivatedbidders, three sets of strategies,” said Lee Berke, principleof consultancy LHB Sports, Entertainment & Media. “Thisis not just a broadcast-network ego thing,where you had to have the Olympics andthen figure out a way to make it profitable.These are integrated media companieswith multiple platforms that have toshow shareholders how this makes financialsense.”

It could also bring a rolled-up dualbroadcast audience by including MyNetworkTV into the mix.

On the cable side, Fox is bolstering the99 million-home FX with sports, adding college football andsoccer. Fox reaches another 85 million homes via various regionalsports networks, which could provide local flair for athleteshailing from specific areas around the country. Speed (84million subscribers), National Geographic Channel (71 million)and BTN (the erstwhile Big Ten Network, available to 80million homes) round out the arsenal.

Fox Soccer Channel would be a natural roost for the RioGames, a nation fueled by fever of joga bonita.

“The Olympic Games are the ultimate in world sports competition,”a Fox spokesman said. “Fox plans to present everythingwe have to offer in detail and submit what we considerto be a competitive bid that supports the IOC’s goals and alsoworks financially for News Corp.”

DISNEY GOES NEXT

ESPN/ABC goes first on Tuesday. Withmonthly license fees averaging morethan $4.50 per subscriber, the worldwideleader has the financial wherewithalto stuff the sealed envelope themost. And its success with the 2010FIFA World Cup in South Africa was astrong audition for the IOC.

ESPN is committed to airing all ofthe Olympic action live. Executive vicepresident of content John Skipper, whoalong with ESPN/ABC Sports presidentGeorge Bodenheimer and vice presidentof corporate projects Rob Simmelkjaerwill be joining Disney topperIger in Lausanne, has said the networkwould then create more dramatic,taped packages for primetime on ABC.

Like ESPN, ESPN2 is in some 100million homes, with ESPNews andESPNU counting 74 million and 73million households, respectively.ESPN Classic has 35 million.

Other assets include ESPN 3D,HD services, Spanish-language serviceESPN Deportes, radio, print,ESPN.com, and five regional websites.Broadband portal ESPN3.com reaches60 million U.S. homes, and digital assetsencompass mobile, authenticatedservices WatchESPN and up to 30 differentapps.

“No one else comes close to ESPN in ourability across multiple platforms to presentand promote the Olympics and to raisethe profi le of Olympic athletes,” a companyspokeswoman said.

NBC Sports declined to comment aboutits Olympic strategies or if it was consideringpresenting all of the games live.

NBC has held back televising key eventsuntil primetime. Still, NBCU scored themost-watched event in U.S. TV history as some 215 millionsaw its networks’ 3,600 combined hours from Beijing in 2008,boosted by the phenomenon known as Michael Phelps.

With Comcast now in control of the joint venture, nationalcable sports network Versus would also be in play, theGames presumably a key driver to increase its 28-cents-permonthlicense fee and subscriber base from its current totalof 76 million.

Universal Sports, a joint venture with Leo Hindery’s IntermediaPartners, which currently showcases Olympic-relatedsports, and Golf Channel — the game becomes an Olympicsport in London — also figure to be in the mix.

All told, NBCU wields assets and cross-promotional capabilitiesstemming from 20 networks and 40 attendant Web sites.And NBC has televised more Olympics than any other networkwith the total, reaching 13 and seven in a row in London.Last time around in 2003, the companies made their presentationsand offered a sealed bid. Given NBC and GE’s zeal,it was games, set and match.

This year’s auction is supposed to follow the same format.But the parties may be asked to make presentations that wouldinclude the 2018 Winter and 2010 Summer Olympics, the citysites for which have not yet been determined.

That could up the ante to the $4 billion mark.

HANDICAPPING THE PLAY

However it goes, the white smoke is expected to waft over Lausanneto America by mid-afternoon Tuesday. Rest assured, thewinner will have extended a lot of green. That most likely willbe the fate for most distributors, as well, in the manner of higherchannel-license and retransmission-consent fees and/orOlympic surcharges.

In the end, Berke believes Comcast will maintain NBC’sOlympic heritage, but it might have to do business in a diff erentway, perhaps with lower production costs and a greater utilizationof the world feed. “Comcast, in the end, will find a wayto make it work,” he said. “However, I wouldn’t be surprised tosee ESPN win the bid.”

Mansell sees it as a toss-up. “You think Comcast has motivationto keep the games for NBC Sports, and ABC/ESPNcertainly has the resources. But Barry Frank [IMG Media’sexecutive vice president], who’s so involved with so manythings, he’s picking Fox. It’s really tough to predict this.Who wants it most?”